11 JUL 2018
Bharti Airtel opened talks to raise $1 billion from international investment banks to refinance existing debt and release cash to expand its 4G network in India, The Economic Times (ET) reported.
The newspaper’s sources said the operator’s drive to improve its cash position is a response to huge investments made by rival Reliance Jio to build out its 4G network, and ahead of its dethroning as the country’s largest operator following a merger of Vodafone India and Idea Cellular.
A combined Vodafone and Idea will be a “strong investor in India”, Vodafone Group CFO (and CEO in-waiting) Nick Read told Business Standard.
Increased investment by the new market leader will likely further crank up the pressure on Airtel, which has already suffered from intense competition in its home market.
In its fiscal Q4 2017 – the operator’s latest financial results, which cover the period to end-March – Airtel reported its largest profit drop in 15 years attributed to “artificially suppressed pricing”.
The company and India’s other operators have been under severe financial pressure since the entry of Reliance Jio in 2016 and a subsequent price war.
In November 2017 Airtel chairman Sunil Bharti Mittal (pictured) estimated Jio’s entry had caused the country’s other operators to write-off investments worth $40 billion to $50 billion. Several smaller operators in the country have either sold to rivals or been driven to the brink of insolvency in the face of market conditions.
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